How reliable is Danang postal service for letters send abroad?

Is it reliable or hit/miss with long delays?

Would Fedex/UPS be a better alternative for time-sensitive items, albeit more costly?

Reliability and speed are different things.  Unless of course you want to say that VNPT is reliably slow. 

I have sent documents in both directions and would say that if time and trackabiltiy matter, stick with FEDEX.  I don't know if international mail leaves directly from Da Nang airport but I know that letters can sit in Tan Son Nhat for as long as a week before they leave the country.  I don't know why but based on tracking notices, I have observed that repeatedly.    Also USPS mail sent from the US is not trackable on the US website.   You will have to use the VNPT site which won't show anything until the letter enters Vietnam.

Heavy items are different but a FEDEX envelope is about $50 vs about $30 for VNPT's fastest traceable service and it arrives in 3-5 days maximum.  Sometimes it is only two days because of the one day gain.  VNPT express service takes a little longer and is inconsistent for time taken, usually about a week.  Normal letters, not time sensitive, via VNPT to the US take about two weeks but are a lot cheaper.

I can't say for sure but I expect that the days of Vietnamese authorities opening people's mail are long since over.  The time delays of VNPT are just plain old bureaucratic inefficiency.

Great, thx again for the help :-)

Trying to receive my mail from USA to Hanoi. It's been 3 weeks and still no mail delivered to my Hanoi address. Can anyone here give tips on how I can find my mail?

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